The newest version of Hangouts (7.0) now allows users to open up a floating quick reply box directly from a Hangouts notification. Users will also be able to “Send and receive both Hangouts and text messages (SMS/MMS) and switch easily between message types.”
It is to be noted that Hangouts’ iOS app and the Messenger both received the quick reply notification feature a couple of months back. When one taps the reply from a notification option, a keyboard and message box will pop up. If the user feels that he needs to write the reply on the app instead of using this option, then a tap on the button on the top right will save what had been written and can later be pasted to Hangouts. However, the option for replying is only available when the message is unread. If there are multiple messages, one cannot reply quickly.
This is now one more neat update from Google !